Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
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Morning Brew August 14 2023
Erik Schafhauser
Senior Relationship Manager
Summary: Yields again...
Good Morning,
China's new bank loans tumbled in July weighing on risk sentiment after the higher then expected PPI on Friday. Last week had been marked by lower stocks with the Dow at -0.6% on the week, the S&P500 -0.3% and the Nasdaq -1.9%.
Right now, the US500 is trading at 4457, the US Tech 100 NAS 15000 and the GER40 art 15780.
After the higher than expected US PPI, bonds sold off and the 5-year yield rose 7bps to 4.25%, the 2-year and 10-year yields gained 5bps to 4.89% and 4.15% respectively.
On the High Yields, the USD Index rises to 103 – to a large extent driven by USDJPY which rose to the 2023 high at 145.22 before seceding to just below the 145 figure. EURUSD trades at 1.0930, GBPUSD 1.2675 and Gold and Silver 1912 and 22.60.
Copper prices dropped on worries about the Chinese property market and overall growth in China.
Ukraine reports Wheat harvest could be as much as 5% above last years due to good weather conditions but safe transport remains an issue. At the same time the US expects lower corn and soybean harvests.
Ole published a commodity outlook, pls see it here
This week there is little in terms of top tier data but we are closely monitoring the US yields, possible measures in China to boost economic growth and we are approaching the Jackson Hole Economic Symposium from August 25 and the BRICS summit in South Africa from August 22.
If yields continue to rise, we can expect the slide in tech stocks to continue which would fit well in to the picture that they were trading in bubble territory.
Trade Safely
Monday August 14
Data: Sweden House Price
Earnings: PetroChina , Agricultural Bank of China, China Construction Bank, Meituan,, Xiaomi Corp
Tuesday August 15
Data: Japan GDP, China Retail Sales, UK Labor Data, DE ZEW, US Retail Sales, CA CPI
Earnings: Suncor Energy Inc, Alcon, Home Depot Inc,
Wednesday August 16
Data: AU Rate decision, UK CPI, EU GDP, US Indurstrial Production,
Earnings: Tencent Holdings, Cisco, JD.com, Synopsys Inc
Thursday August 17
Data: JP Trade, Initial Jobless claims
Earnings: Target Corp, CNOOC,, Adyen, Walmart Inc, Applied Materials Inc,
Friday August 18
Data: UK Retail sales, HICP
Earnings: Palo Alto Networks, Deere, Estee Lauder
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